Funding of €15 million has been allocated for a new 120-bed unit at the National Rehabilitation Hospital in Dún Laoghaire, Co Dublin.
Minister for Health Leo Varadkar confirmed the funding on Tuesday.
The hospital recently secured planning permission from An Bord Pleanála for the development.
Mr Varadkar said the increased exchequer allocation, in addition to the NRH’s own contribution, would enable the HSE and the hospital to proceed with the work.
The hospital provides complex specialist rehabilitation services to patients across the country who, as a result of an accident, illness or injury, have acquired a physical or cognitive disability.
It is a publicly funded, voluntary hospital and is the only one of its type in the country.
Those patients attending the NRH often require complex specialist rehabilitation.
The facility will include integrated therapy spaces, hydrotherapy and sports facilities on the NRH campus.
Maternity review
Separately, there were concerns a review of maternity services at Portiuncula, due to be completed next month, was now to be delayed for several months.
At least 12 births at the hospital up to November of last year are being investigated.
Fianna Fáil Galway West TD Colm Keaveney said the affected families were being "left in limbo" as the Government continued to "kick to touch on this extremely important issue".
“A review of maternity services, which includes investigations into a number of births, was due to be completed next month. We are now learning that it is being delayed for several months, and possibly until after the next general election,” Mr Keaveney said.
“This review should provide vital answers to a number of parents whose babies died or suffered problematic births at Portiuncula.
“It is completely unacceptable that these families are being expected to wait in the dark for even longer for answers.
“This is not something that happened decades ago. These are very recent tragedies exposing risks at the hospital that must be addressed without further delay.”